Monday, 3 June 2013

FG Confirms Massive Dumping of Crude Palm Oil on Nigeria

Minister of Agriculture and Rural Development Dr. Akinwumi Adesina

The Federal Government has confirmed the illegal flooding of Nigeria’s market with large volumes of crude palm oil (CPO) import from neighbouring West African nations, under the guise of the ECOWAS Trade Liberalisation Scheme (ETLS).

The ETLS is a regional trade facilitation agreement endorsed by nations under ECOWAS and it is designed to boost trade among them by allowing reciprocal, duty free importation of goods and services within the West African countries. However, the goods and services entitled to move duty-free within the region must be indigenous to the exporting nation and must fully originate from there.

Minister of Agriculture and Rural Development Dr. Akinwumi Adesina, noted at the weekend that available statistics strongly suggests that in the closest West African nations to Nigeria, most of the palm oil they import from Malaysia, Indonesia, Singapore and others actually end up in the Nigerian market duty-free; thereby displacing locally produced palm oil from the market and suffocating the Nigerian oil palm plantations.

According to Adesina, the aggregate locally produced and imported palm oil in these neighbouring West African nations by far surpasses what they require both for their domestic and industrial consumption, therefore making the massive Nigerian market the dumping ground for these cheap CPO, which also comes into Nigeria duty-free under ETLS; making it by far cheaper than the CPO produced within Nigeria.

“We should be producing and exporting into those countries. We should not be using those countries as transit areas. Regional trade does not mean that we should import. Neighbouring West African countries import crude palm oil far higher than their needs. For Benin Republic 2003 to 2013, their production was stagnant, but their export increased by 1,018 per cent. Their import increased by 1,084 per cent of crude palm oil.

“Ghana’s production was also stagnant for the period. Their export rose by 62 per cent. Cote d’Ivoire production declined by 20 per cent during the period, but their export rose by 74 per cent. From all the evidence that I have seen, it appears they are re-exporting into Nigeria, which is killing the oil palm industry in Nigeria. We need to discuss on how regional trade will benefit us and not the one that will deplete our own resources,” Adesina said.

The minister stressed that present times are different and that in every part of the world where agriculture is growing, it is because their governments are supporting them.

“Last year, we started the distribution of sprouted oil palm nuts. We gave 1.4 million sprouted nuts free. The farmers have to recapitalise their plantations. It is the job of government to do that. These are high-yielding Tenera seedlings. As I look at the Nigerian Stock Exchange, I always get excited because two of the best performing stocks are from the oil palm industry and we intend to ensure that it stays so”

Explaining that it was possible for Nigeria to become self-sufficient in palm oil production and consumption, Adesina explained that a similar experience occurred with rice. He stated: “when the issue of waivers came up for rice, Mr. President was under enormous pressure to grant waivers for importations. He didn’t give the waivers. Today, Nigeria is on its way to self sufficiency in rice production. We have to do the same with the palm oil industry.

“It is shameful that we are importing crude palm oil. We should be exporting. The fact that we are having a discussion on whether we should lower the tariff, so that we could be importing, makes absolutely no sense. Some make a case for those who need palm oil for processing. We are already paying a higher price because we have rising unemployment in our rural areas; we are spending hard-earned foreign exchange on importing. We are paying a higher price with the livelihoods of rural areas producing palm oil being severely threatened. We are paying a higher price because the naira is weakened anytime we are importing,” he said.

“I am against reduction of tariff from 35 per cent, because every country must do what is in its interest. We cannot revive our rural areas if we are opening up our markets for everyone to dump every junk. The issue of ETLS is of great concern. ETLS in the region is to expand trade, but every country must do what is in its interest,” Adesina added.